Autonomous AP
High Technology needs to move fast but control spend
It’s a great time to be in High Technology. Powered by enterprises’ digital transformation initiatives and the rapid pace of innovations like cloud and AI, companies in High Technology must move quickly to take advantage of the opportunity in front of them. And because of that, finance teams need to be vigilant. Massive growth can sometimes lessen an organization’s spend discipline as business leaders and salespeople trade off being frugal for the real prize – top-line expansion. This can breed a wasteful or even profligate spend culture and can let those responsible for reviewing expenditures off the hook from doing proper diligence before reimbursing employees or approving invoices.
When it comes to your business spend, there are tons of opportunities for errors, waste, and fraud. Your organization probably spends a lot, both on the employee expense side as your business leaders and salespeople travel to see, entertain, and build relationships with customers and prospects, as well as on the business side for direct and indirect supplies and contracted work. As your employees run to keep up with the pace of your business, spend controls and regulatory compliance may not be top of mind for them.
Just because these things are not a focus doesn’t mean they can’t have a negative impact on your bottom line and regulatory stance if left unchecked. Take expense reports. According to the Association of Certified Fraud Examiners (ACFE), the median expense reimbursement fraud scheme adds is valued at $31,000 and lasts 24 months. Organizations with large sales teams need to be especially observant, as sales is among the functions at greatest risk for occupational fraud (after accounting and operations). Beyond fraud, errors and waste can really add up. People submit the same receipt twice by accident, fat finger the reimbursement amount on their expense report, upgrade their airline ticket or hotel room against your policy, or source their own travel outside of your negotiated corporate program.
Perhaps even more important than spend leakage in expense reports is keeping your knowledge workers productive and happy and not bogging them down with process. The expense reporting and reimbursement process can be onerous and time consuming for them, their managers, and your auditors. The result is they don’t get paid back quickly. If they’re independently wealthy or a lottery winner, it may not be a big deal, but for most of us, it can be a real burden. And because companies like yours usually compete for talent, you need to do everything you can do to keep employees happy and efficient.
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Reduction in reimbursement time
Why high technology companies need AI in their AP process
On the invoice and billing side, the median fraud scheme comes to $100,000 over the same 24-month time period, according to the ACFE. Besides outright fraud, there are tons of examples of invoicing errors that can add up. Depending on your level of AP automation and centralization, your organization experiences an invoice error rate between 10 and 30 percent, according to the Institute of Finance and Management (IOFM). Many invoice automation systems catch simple errors like duplicates with the same number or amount, but never see when an invoice system double-charges you for something you’ve reimbursed already in an employee expense report or through hard-to-see invoice duplicates such as many small charges adding up or ones submitted months apart. Even more difficult to see is whether those invoices are applying the payment terms and volume discounts you’ve so carefully negotiated during your procurement process. Adding insult to injury, if your company has been acquisitive, you may have an array of back-office systems that make keeping track of spend even more difficult. Even if your invoice automation system can identify some of these issues through approval workflows or matching features, if you’re like most high-growth companies, you may not be taking advantage of all of those capabilities.
Another consideration beyond spend leakage is regulatory compliance. Even though High Technology can seem a little more freewheeling than other industries, there are still laws you need to consider in your spend review policy and audit process. These include anti-bribery and corruption, export controls, sanctions laws, regulations covering debarred vendors, and more. Every year, High Technology is well represented among regulatory authority actions that carry stiff penalties. Very often, regulatory violations hide out in your contracts and invoices. This can range from bribes paid to foreign government authorities via distributors to company stock grants made to people (or directed to their nonprofit organizations) who may influence purchases of your company’s products to payments to debarred or sanctioned vendors.
What is required is a smart spend audit process that automates review of all of your expenses and invoices. It should understand and keep track of your corporate policy and negotiated supplier contracts, as well as all spend-related laws such as the Foreign Corrupt Practices Act (FCPA) and those governed by the Office of Foreign Assets Control (OFAC). And finally, it needs to protect you from overpaying, double-paying, or being the victim of fraud.
AI-powered spend auditing from AppZen is just the ticket for your finance team to get control of spend, keep your company out of regulatory hot water, and cut unnecessary bottlenecks out of your spend approvals so people and suppliers can get paid on time. Our platform is a must have for modern finance teams to reduce spend, comply with policy, and streamline process.
We’ve reduced our global reimbursement time to less than a day.”
SENIOR DIRECTOR, ACCOUNTS PAYABLEHIGH TECHNOLOGY
Three of the top five high technology firms audit spend with AppZen.
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